Umid

Umid Gas Field Profile

Location and Geology

• The Umid gas field is located in the shallow waters of the Caspian Sea, offshore Azerbaijan.
• The field is part of the Umid-Babek contract area, which also includes the Babek exploration prospect.

Operators and Partnerships

• The Umid gas field is operated under a Risk Service Agreement (RSA) awarded in 2017. The State Oil Company of Azerbaijan Republic (SOCAR) leads the development, in partnership with Nobel Oil (Nobel Upstream).

History and Production

• The Umid field has been in production since 2012. Output from the Umid-1 platform has seen significant increases since 2022, driven by new drilling activities and the installation of a larger-capacity pipeline to shore.
• As of recent developments, natural gas produced from the Umid field is planned to be sent to the domestic market in Azerbaijan, which will free up gas from other developments for export to Europe.

Infrastructure

• The initial production from Umid was tied in via the Bulla Deniz field starting in 2012. A dedicated pipeline to shore was commissioned in 2022, enhancing the field's production capacity.
• The field's infrastructure includes the Umid-1 platform, with plans for investment in a second platform, Umid-2.

Reserves and Resources

• The Umid field holds significant gas reserves, with the field alone having a potential of nearly 200 billion cubic meters of gas. This contributes to Azerbaijan's overall proven gas reserves of 2.6 trillion cubic meters and estimated reserves of approximately 3 trillion cubic meters.

Development Metrics

• Key development metrics include the rapid increase in production following new drilling and infrastructure upgrades. The field's production profile has been enhanced by these recent developments.
• Further phases of the Umid field development are planned, including the conceptual development of the Babek prospect, which is part of the same contract area.

Economic and Fiscal Aspects

• The project operates under a Risk Service Agreement (RSA), which includes cost recovery, profit sharing, tax, and depreciation mechanisms. This agreement governs the economic and fiscal terms of the project.
• The economic analysis of the project includes cash flow projections, discount rates, inflation rates, and oil and gas price assumptions. The report also details the split of revenues and cumulative net cash flow analyses.

Sales Contracts and Market Routes

• Gas produced from the Umid field is primarily intended for the domestic market in Azerbaijan, which helps in freeing up gas from other fields for export to Europe.
• The field's gas and condensate are transported via pipelines to shore, with routes to market including domestic sales and potential exports via existing infrastructure such as the Baku-Tbilisi-Ceyhan (BTC) pipeline for other fields.

Costs and Operating Expenses

• The project incurs various costs, including exploration and appraisal (E&A) costs, capital costs, operating costs, field costs, abandonment fund payments, and transportation costs. These costs are detailed in the economic analysis of the project.

In summary, the Umid gas field is a significant contributor to Azerbaijan's energy sector, with substantial gas reserves and ongoing development to enhance production and support both domestic and international gas markets.